Many policyholders making Hurricane Sandy personal property claims will not get paid what they deserve because their insurance adjusters fail to tell them to include all acquisition and setup costs when determining value. I thought about this over the weekend following Friday’s post, The Mythical National Flood Claim Memo and Sandy Flood Claims.
The lengthy post included an official memorandum regarding the adjustment of flood claims, which is applicable to the adjustment of non-flood claims. It was authored by a very well respected claims manager and adjuster, Jim Shortley. Jim has been a regular lecturer at the Windstorm Insurance Conference and we have discussed various claims issues over the years.
Significantly, he noted:
"…we expect estimated costs of personal property to include any delivery costs, setup fees, and sales tax. These are standard practices within the insurance industry."
My simple rule is that personal property claims should reflect the value of the item, all of its acquisition costs, and all setup costs. Taxes, shipping and other costs to obtain an item are acquisition costs. Many items have to be placed and set before they are usable. Those costs should also be included, assuming the damaged item had been placed and set.
- After the loss, keep a log of all activities and save all receipts related to the damage, including those for property replacement and other expenses. If your bank or credit card institution charges for recovery of old records, document and retain receipts for these types of charges.
- Consult with an expert regarding what they charge for appraisal of lost personal property. Keep detailed documentation of all charges incurred for obtaining an appraisal or estimate of the current value of lost property such as artwork, jewelry and valuable collectibles.
- Detail hours lost from work and decreased wages resulting from time spent documenting your loss. The more documentation and support, the better. Each time period will need to be supported with contemporaneous records and proof of hourly rates.
- Use your home accounting system to record extra costs. Be sure to show that these costs are related to the disaster and contemporaneously record the reason that the cost was incurred, and why it was caused by the disaster.
- Always communicate in writing – both with your insurance adjuster and with others helping you prepare your claim. After conversations with the insurance adjuster or others at the insurance company, follow up with an email accurately documenting what was discussed and what the insurer stated during the conversation.
I hope this reminder is helpful for Hurricane Sandy adjusters and policyholders.